The tumult surrounding the $28,500 loan through Prosper to Syed Rizwan Farook, one of the shooters that killed 14 people, can only be called misguided.

There’s also a streak of disingenuousness coming out of bank regulators that deserves to be called out.

What is clear is that Farook, the husband in the murderous team, took out the loan via Prosper’s site “in the weeks before the shooting.” Prosper maintains that it originated the loan in accordance with federal laws:

All loans originated through the Prosper platform are subject to all identity verification and screening procedures required by law, including U.S. antiterrorism and antimoney laundering laws. As part of our standard procedures, we also confirm that all loan funds are disbursed into a verified U.S. bank account in the borrower’s name. Like all Americans, Prosper is shocked and saddened by recent events in San Bernardino.

It turns out that it was Citigroup that funded the loan through Prosper, according to The Wall Street Journal.

A subsidiary of Citigroup called CIGPFI Corp. in October packaged Prosper loans into a $376-million security. These packages make it possible for pension funds, insurance companies and other large investors to get into the fast-growing field of online lending.

There is no surprise here. The dirty little secret around marketplace lending is that it has become an asset conduit for Wall Street. There’s nothing “innovative” about marketplace lending any longer: these are high-coupon credits to which Wall Street has wizened up.

But what is surprising is the reaction of federal regulators. Here’s what one told The Wall Street Journal:

A spokesman for FinCEN, the Treasury unit that collects suspicious activity reports, said, federal law prohibits the agency from commenting publicly about the existence, or non-existence, of any suspicious activity reports. “We will certainly be appropriately responsive to inquiries from Congress, and we will continue to work closely with our law enforcement partners as the investigation progresses,” he said.

Oh, really? The Office of Foreign Assets Control, otherwise known as OFAC, publishes its list of “Specially Designated Nationals and Blocked Persons (called the SDN List) online. It’s right here. Run a search for yourself for “Farook,” “Syed” or “Tashfeen.” Nothing comes up. Prosper, WebBank, which provides banking services to Prosper, and Citi all declined to get into the specifics of the loan because of “privacy” issues, but Prosper makes it clear in its Privacy Policy that it will share information with law enforcement when necessary.

We may share your information with law enforcement or other government agencies as required by law or for the purposes of limiting fraud. We reserve the right to disclose your personally identifiable information when we believe that disclosure is necessary to protect our rights and/or to comply with a judicial proceeding, court order, or legal process served on us.

If the terrorists don’t come up on the OFAC lists, what are the lenders to do? The fact that regulators do not come out and say this definitely, to absolve Farook’s lenders from culpability (as reprehensible and vulgar and saddening as the attack is), gives air to a suggestion that perhaps the lenders did something wrong. It is fueling the Congressional investigation and tainting marketplace lending. No one wants a terrorist to get funding through any means, let alone “fast and easy” online, but regulators have pushed their own obligations for enforcement on lenders. At some point, regulators need to own up to the fact that they and law enforcement failed to prevent a horrific terrorist attack, not an online lender originating credits.